Coca-Cola: A Solid Dividend Stock in Uncertain Times
Coca-Cola is known for its continuous dividend growth and solid finances, which are particularly attractive to investors in an uncertain economic environment. Here are some key aspects that underscore Coca-Cola’s appeal as a dividend stock:
Continuous Dividend Growth
- Current Increase: In the current year, Coca-Cola has increased its dividend by 5.20%.
- Long-Term Increase: Over the last ten years, the average annual dividend growth has been 4.67%.
- 5-Year View: Over a 5-year view, the payout has increased by 4.35%.
Solid Finances
- Payout Ratio: The payout ratio on free cash flow is 179.4%, indicating that the company uses a substantial portion of its cash flow for dividends.
- Valuation: The stock is currently trading at a price-to-earnings (P/E) ratio of 24, which isaverage compared to the last five years.
Comparison with PepsiCo
- Dividend Growth: PepsiCo has increased its dividend by an average of 7.5% over the last ten years, which is higher than Coca-Cola.
- Valuation: PepsiCo is currently trading at a P/E ratio of 18, which is below the historical average and makes the stock appear more attractive.
Despite solid finances and continuous dividend growth, PepsiCo currently offers a more attractive valuation and higher dividend growth. Nevertheless, Coca-Cola remains an appealing dividend stock for long-term investors.